Digital wellness startup HealthifyMe sees growth amid pandemic; eyes Rs 150 Cr ARR by January 2021
The coronavirus pandemic has made people more health conscious than before. With COVID-19 being increasingly associated with comorbidities and social distancing becoming the new norm, people have turned to digital wellness platforms to keep fit and stay healthy.
In this scenario, digital wellness startup, which offers coaching and AI-based nutrition plans to customers, has reported a rise in revenues and paying customers in the past few months.
To cater to the increasing demand, HealthifyMe is effectively leveraging its in-house artificial intelligence (AI) platform to provide services for a much lesser price, along with a personalised touch.
Founded in 2012, HealthifyMe is backed by VCs like Chiratae Ventures and Inventus Capital. The startup claims to have more than doubled its paying subscriber base to one lakh plus since April this year, while the app download has crossed 16 million.
The startup is now looking to cross an annual recurring revenue (ARR) of $20 million (Rs 148 crore approximately) by January 2021. It already crossed $15 million (Rs 111 crore approximately) in August this year.
HealthifyMe has also been operationally profitable since April this year with positive contribution margins, and is aiming to become earnings before interest tax, depreciation, and amortisation (EBITDA) profitable in the next 12-18 months.
The startup has also reduced its burn rate by more than half in the last six months. The company attributed this to lower expenses due to the organic lift it had.
“The number of users who were downloading our app through word of mouth went from 25% to 47% of our half a million monthly registrations. So we could afford to reduce marketing while still maintaining more than 35% quarterly growth,” the company said.
This meant that there was an increase in revenues despite reduction in marketing which helped drive profitability.
HealthifyMe employees with co-founder & CEO Tushar Vashisht
The power of AI
The key engine which is powering the growth of HealthifyMe is its AI platform Ria.
Tushar Vashisht, co-founder and CEO, HealthifyMe, says, “AI is transforming business models. Our business has transformed from a services led model to product led and this comes at a fraction of price point.”
From providing free services to charging a fee, the startup has come a long way, and now its AI engine is enabling a greater number of people to access its products.
HealthifyMe offers a coach plan where the users can interact with the nutritionists or fitness experts, which is priced at Rs 1,200-13,00 per month.
Now, with its AI engine, it is offering a similar service called Smart Plan without human interaction, which is priced at around just Rs 200 per month.
Smart Plans are diet and workout plans designed by its chatbot Ria. According to the company, this is now contributing to 70 percent of the startup’s paid subscriber base.
Tushar says, “This has increased our customer base and allows for larger number of people to user our services.”
Insights through tech
HealthifyMe’s path to profitability began way back in 2017 where its AI engine started directly interacting with customers to give feedback about their diet and fitness. Over the years, the platform has improved and is able to provide more accurate insights.
“RIA is processing sea of data and providing a solution that users need,” says Anjan Bhojarajan, VP, Growth & Head of Product, HealthifyMe.
The startup says its user interaction with Ria went up from around 26 percent to around 60 percent over a period of 18 months.
This resulted in HealthifyMe coming out with its Smart Plan in January 2019 to offer AI-driven fitness and nutrition services.
“We were looking to provide an affordable plan, which is also scalable,” says Anjan.
Anjan Bhojarajan, VP - Growth & Head of Products, HealthifyMe
Its coach led plans are also witnessing higher traction, thanks to the AI engine, which is powering the growth of the company.
“Initially we could support around 35 customers for a single coach plan, but with Ria it has gone to about 230,” says Anjan.
Tushar says, “In the last 18 months, our paying customers have grown by around 5x and most of this is because of our AI engine.”
There has been several positives for HealthifyMe with Ria. It has been able to provide immediate feedback, perform multiple tasks at the same time, and also act as a motivation or reminder tool for the users.
The AI powered Smart Plan was also able to provide better insights. Anjan says the diet requirement of the users can be modified, depending on the personal preference or needs.
Ria has also been navigating through various regional cuisines in the country and curating the best option depending on where the individual is located, along with personal preference.
“For us, the big question was how do we go into specific regional cuisines, and now we have database of over one billion meals tracked by our users by now,” says Anjan.
Similarly, HealthifyMe’s Smart Plan can add fitness videos on the fly for its users depending on their individual requirement.
For HealthifyMe, the coach and smart plans have been the two key flagship offerings, but it has now enhanced its portfolio with Plus and Studio.
Despite the similarity between the human assisted plan and the AI-powered one, Anjan felt a human coach will certainly offer a different kind of motivation level.
Anjan says they found a gap in the market where around 20 percent of HealthifyMe’s customers come with certain pre-existing lifestyle diseases like diabetes, blood pressure, and cholesterol to name a few.
“We thought about bringing in more value to our services with the induction of a doctor in addition to a nutritionist and fitness instructor,” says Anjan.
Hence, in the Studio offering, the startup is now providing live training sessions to a limited set of users.
HealthifyMe is also starting a pilot project which will deal with mental wellness where users can get help from psychologists anonymously.
The COVID-19 pandemic has resulted in more people coming onto the platform. Anjan says, “We saw a rise in numbers both in terms of the number of sessions and users spending more time our app.”
“Our app has witnessed one of the highest engagement, and users have stabilised at a much higher level,” says Tushar.
HealthifyMe has also expanded to overseas locations like Singapore and Malaysia where it has local operations. However, for other regions where the primary customers are NRIs, it is offering services from India.
Talking about future prospects, Tushar says, “This is the best time. We have an AI plan that can scale. We have a product market fit that works and people today are more health consciousness.”